Chester Council discusses budget

CHESTER – City officials may be looking at their own version of austerity now that it is anticipated there will be a $100,000 drop in casino table gaming revenue.

Meeting this week to adopt a budget for the 2013-14 fiscal year, which starts July 1, City Council learned that table gaming revenue will be down significantly from last year.

That could hurt the city’s bottom line, Mayor Ken Morris said.

“It’s pretty significant because our budget is right around $800,000,” Morris said. “I just told them we need to tighten up our belts and not be so frivolous.”

Morris said no layoffs are planned, but city departments are being instructed to watch their expenditures.

“We’re doing OK. We’re not pressing the panic button. We’ve just got to watch what we’re doing,” he said.

City Council on Monday approved a budget of $798,064, but that number could change before the end of the fiscal year, which is June 30, City Clerk Sandra Parkins said.

“I have to take this year’s income and hope we get at least that (next year). We could lose money too,” Parkins said.

Cities and counties in West Virginia must submit their annual budgets to the West Virginia State Auditor’s Office by the end of the month. Chester’s main sources of revenue are the business and occupation tax, municipal fees, business license fees, sheriff’s taxes and gambling, Parkins said.

The business and occupation tax is paid as a percentage of gross income on a quarterly basis. The business license fee is paid once a year.

Revenue from gambling in West Virginia comes from three main sources: Table gaming at the state’s racetrack casinos, slot machines at the casinos and limited video lottery.

Two percent of the revenue from limited video lottery goes directly from the West Virginia Lottery to counties and cities. Two percent of the revenue from the slot machines at Mountaineer Casino, Racetrack and Resort goes to Hancock County commissioners, who then share those profits with the county’s three cities based on their population, Commissioner Dan Greathouse said.

Last year, Mountaineer slot machines contributed $2.8 million to county coffers, and $700,000 of that was divided among Chester, New Cumberland and Weirton at the end of the year, Greathouse said.

It is a loss in revenue from table gaming, attributable to competition from new casinos in bordering states, that is most worrisome to city officials.

“We knew it wouldn’t last forever,” 3rd Ward Councilman Mike Dotson said. “The table games have been cut because other casinos in the area have started to open up.”

In Ohio, four casinos have opened in Toledo, Cleveland, Columbus and Cincinnati in the past year. Pennsylvania and Maryland also have seen an increase in the number of casinos.

Earlier this month, Mountaineer reported a 15.8 percent drop in revenue for the last three months of 2012 compared to the same time period in 2011. Revenue from table gaming fell by $2.1 million – a drop that Mountaineer’s parent company, MTR Gaming Group, blamed on “increased competition from Ohio.”

Parkins noted the anticipated drop in table gaming revenue includes all the casinos in West Virginia, not just Mountaineer.

“It all goes to the state, and the state divides it up among the counties and cities, and we get a portion of that,” she said.

Chester’s budget covers operations for the street department, the police department and the building department (Chester Municipal Building), Dotson said. The Chester Water and Sewer Department has its own budget and a separate budgeting process.

The biggest portion of the city’s budget, by far, is payroll and health insurance for the city’s police officers, Morris said. City officials may realize some savings with the expected retirement of Police Lt. Jim Bryan and Police Chief Ken Thorn, he said.